Belgium raises 2.0 billion euros, pays higher rates

28th November 2011, Comments 0 comments

Belgium raised 2.0 billion euros ($2.68 billion) in a bond auction on Monday, but had to pay higher interest rates despite a weekend deal on the country's 2012 budget after a shock downgrade.

The country attracted "strong" demand, getting 4.2 billion euros' worth of offers when it had sought to raise between 1.0 and 2.0 billion euros, a top official for the Belgian debt agency, Jean Deboutte, told reporters.

But Belgium had to pay a high yield, or interest rate, with investors demanding a 5.65 percent return for benchmark 10-year bonds compared to 4.37 percent when last issued on October 31.

With markets threatening to drag the country into the eurozone debt spiral, Belgian politicians finally struck a deal on an austerity budget at the weekend, paving the way for the formation of a government 19 months after elections.

The country's borrowing costs have risen in recent weeks and ratings agency Standard & Poor's on Friday downgraded Belgium's debt by one notch, citing the country's world-record political stalemate and slowing growth.

© 2011 AFP

0 Comments To This Article